1.5m housing target won’t be met without tax relief for house builders in the Budget
The chancellor, Rachel Reeves, must introduce more tax relief for house builders in the Autumn Budget to reach the government’s house building goals, say tax and business advisory firm, Blick Rothenberg.
Heather Powell, a partner at the firm, said: “House builders need to know they will make a profit to want to build. The housebuilding industry estimates that the cost of building a home has increased by 40% in the last 5 years, while average house prices have only increased by 20%. The rise in Employers National Insurance Contributions (NICs) is only adding to the cost of construction. Rachel Reeves must consider targeted employment tax relief for builders if the government is to reach it’s 1.5m housing goal.”
She added: “The huge increase in landfill tax, which is paid on waste disposal at landfill sites, was ‘hidden’ in Treasury announcements at the last Budget. It makes building on brownfield sites and redevelopment harder as it increases costs when builders need to dispose of rubble. This increase should be reversed, or house builders should pay a reduced rate.”
Heather said: “Rachel Reeves should include more investment in the planning system at the Autumn Budget. Included in the 1.5m target is delivery of 88,000 new homes a year in London, but the stats for the first 6 months of 2025 report just 2,158 homes have begun construction in London in 2025, and only 3,950 new homes have been sold in that period. This is linked to delays on the approval of flat schemes due to the new planning regime, and in particular the requirement for the Building Safety Regulator to approve schemes where the development is more than 18m high.”
She added: “This requirement was introduced without sufficient investment in the regulator team that goes through the applications from developers, and as a result there have been huge delays to development timelines. An increase of 100 staff for this team is promised, but it may not be sufficient. When new regulations are introduced, the team implementing the rules should already have the resources and numbers to process applications in place!”
Heather said: “Finally, more support for first time buyers is needed. The withdrawal of the help to buy scheme has had a significant impact on demand from first time buyers, this scheme should be re-introduced. Measures that reduce interest rates would also be very welcome as this makes everything easier for buyers.”